Investors are still holding their breath over Friday’s report of a slowdown in inflation, and for good reason.
After a surprisingly strong jobs report rocked the markets earlier this month, all eyes are on the Consumer Price Index (CPI) to see what the Federal Reserve might do next.
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Why Inflation Data Moves Bitcoin Price
When inflation is high, the Fed hits the brakes by keeping interest rates high. Higher rates make borrowing more expensive, which often encourages investors to pull money out of “risky assets” like Bitcoin and technology stocks in favor of safer bets.
Recently, we saw a “hot” labor report showing the economy added 130,000 jobs.
January jobs report: private employment increases, government jobs shrink.
Nonfarm payrolls up 130K, total employment up 528K, state employment now lowest since 1966.
The labor market is changing in the private sector. Draining the swamp works! pic.twitter.com/7dTYVdXue3
– Stephen Moore (@StephenMoore) February 11, 2026
While that sounds good to workers, markets took it as a sign that the economy is not cooling enough for the Fed to cut rates. As noted in recent expert analysis of energy-driven volatility, these “good news is bad news” variables are currently holding price appreciation.
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What Traders Are Watching This Week
Forecasters predict YoY inflation will drop to 2.5%, down from last month. As a result, this may revive hopes of a rate cut.
Derek Lim, head of research at Caladan, said this metric is currently “more important than employment data,” noting that lower-than-expected inflation will put pressure on the Fed to ease monetary conditions. That would be a green light for dangerous goods.
(Source: BTCUSD / TradingView)
Currently, Bitcoin is settling at around $68,500 after a correction from its high. Caught in a tug of war between technical support levels and major concerns.
While traditional financial giants argue that crypto is a valid asset class in times of uncertainty, the market is looking for a lower ground. Hot inflation could lower that floor, while cool printing could trigger a relief rally.
So, what should you do? First, expect volatility on Friday morning when the CPI release hits the wire.
If the numbers come to a head, we may see a sharp dip in Bitcoin USD prices as traders price in a “higher than long term” interest rate zone.
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The post What This Week’s Price Drop Data Could Mean for Bitcoin & Crypto appeared first on 99Bitcoins.
